Brown lifted by income tax haul leap

A HUGE 11% increase in the amount of income tax raked in by the Inland Revenue in July helped swell the Chancellor's coffers to hit the biggest surplus on record.

Official figures today highlighted the success of the taxman's aggressive stance on collection this year as the year-on-year increase was way in excess of what would be expected from the pace of economic growth.

VAT receipts are also strongly ahead, giving a hint that the huge problem of carousel fraud - where criminal gangs are illegally charging VAT on goods but not handing it over to the taxman - could be easing off.

'The taxman is getting far more aggressive these days,' said Doug McWilliams at the Centre for Economics and Business Research.

Higher oil prices have also proved a boon for Gordon Brown, as North Sea producers pay more tax, as do British oil companies operating abroad.

Although the figures were skewed by a number of one-off factors including changes in the corporate tax regime for North Sea operators, the public sector's finances showed a £6.3bn surplus - well ahead of the £3bn expected by City economists.

Economists said that the Office for National Statistics figures suggested Brownwas on track to meet his target of ending the year borrowing £7bn.